The reforms are designed to enhance the quality of health insurance, although they have faced criticism from some health insurance managers.

The recent hospital reform in Germany, passed by the Bundestag, is set to take effect on January 1, 2025, with full implementation expected by 2029.

Without the reform, Lauterbach warns that several hundred hospitals could face insolvency next year, especially in rural areas where they are still needed.

Currently, one-third of hospital beds are unoccupied, and there is a shortage of medical personnel, which further highlights the necessity for reform.

This reform aims to restructure hospital financing and promote specialization for complex medical procedures, addressing the current inefficiencies in the healthcare system.

Germany currently has around 1,700 hospitals, the highest density in Europe, but many are operating at a loss, leading to the need for significant changes.

Health Minister Karl Lauterbach predicts that hundreds of hospitals will close in the coming years, particularly in large cities in western Germany, due to insufficient medical demand.

Under the new funding model, hospitals will receive 60% of their funding for maintaining specific services, reducing the pressure to treat as many cases as possible.

Lauterbach believes that reducing the number of health insurance companies is sensible and plans to enhance their quality through new legislation.

Lauterbach has described this reform as the most significant healthcare reform in 20 years, emphasizing its potential to improve the quality of care.

While health insurance premiums are expected to rise next year, Lauterbach does not anticipate further increases for 2026 due to the reforms already in place.

Opposition critics, including CDU health politician Tino Sorge, have accused Lauterbach of misrepresenting the costs associated with the reforms.